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  1. #31
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    Quote Originally Posted by fungus pudding View Post
    "All gains, income and capital, should be taxed"

    So along with that I presume you think all capital losses should be deductible.

    "All gains, income and capital, should be taxed"


    Then it would no longer be a flat tax.
    All net gains...so yes losses would be deductible or be able to be carried forward...

    Of course it would still be a flat tax if all gains were taxed at say 20%. It is an arbitrary decision to tax all income and not all capital gains.

    However you may be talking about a poll tax? Every person (or adult?) taxed the same dollar amount? Which of course takes no account of career progression and would end up with a gerontocracy with most young adults and families in tenements owned by the one percenters?
    Last edited by Bjauck; 24-06-2020 at 02:19 PM.

  2. #32
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    [QUOTE=SBQ;822988]Need to distinguish what category of tax we're talking about, which are basically 2 camps ; Consumption Tax and Income Tax.

    If Labour should be returned to office after this coming election, more than likely there will be an increase and additional taxes applied. Call what ever you wish, but in the end it's just another tax.








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  3. #33
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    [QUOTE=waikare;824753]
    Quote Originally Posted by SBQ View Post
    Need to distinguish what category of tax we're talking about, which are basically 2 camps ; Consumption Tax and Income Tax.
    If Labour should be returned to office after this coming election, more than likely there will be an increase and additional taxes applied. Call what ever you wish, but in the end it's just another tax.

    Yep and in the grand of schemes... how much taxes is enough we should be paying? That's why when I look at an investment, I need to understand how much tax the corporation pays, how much tax the managed fund pays, how much tax the client pays and their income tax they pay. Then you go on to the consumption side like GST, rates, wow too many to list.... Is there a point where taxes are too high already? As I told my wife this morning, there needs to be another level of tax on the ultra high income earners - those around $70K / year income pay the same level of tax on an extra $1 earned than those CEOs earning $500K to $5M a year !!

  4. #34
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    [QUOTE=SBQ;824842]
    Quote Originally Posted by waikare View Post

    If Labour should be returned to office after this coming election, more than likely there will be an increase and additional taxes applied. Call what ever you wish, but in the end it's just another tax.

    Yep and in the grand of schemes... how much taxes is enough we should be paying? That's why when I look at an investment, I need to understand how much tax the corporation pays, how much tax the managed fund pays, how much tax the client pays and their income tax they pay. Then you go on to the consumption side like GST, rates, wow too many to list.... Is there a point where taxes are too high already? As I told my wife this morning, there needs to be another level of tax on the ultra high income earners - those around $70K / year income pay the same level of tax on an extra $1 earned than those CEOs earning $500K to $5M a year !!
    I agree ....could bring one it @ $125K>> 39% tax.......that along with reducing Council-Govt wages and numbers + cutting back on wasting of Tax payers funds would help ..
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  5. #35
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    [QUOTE=JBmurc;825215]
    Quote Originally Posted by SBQ View Post

    I agree ....could bring one it @ $125K>> 39% tax.......that along with reducing Council-Govt wages and numbers + cutting back on wasting of Tax payers funds would help ..
    Increasing income tax rates for higher incomes will make investing in those assets that earn little income but potentially tax free capital gains even more tax efficient and appealing.

    Some people say that capital gains taxes are iniquitous if they do not allow for the inflationary aspect of maintaining the capital asset. So why shouldn’t an individual (income earning personal capital if you like) be allowed to earn a minimum tax-free income that is necessary for maintaining that individual. If for example $35000 is the current annual amount needed for an individual adult to subsist (food, shelter and nutrition) in NZ, then there should be a threshold of $35,000 before the tax rate is applied. That would help avoid the double taxation of income tax and GST on non-discretionary subsistence expenditure. Of course different areas if NZ have different costs of living, so maybe a regional subsistence threshold would be needed.

  6. #36
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    [QUOTE=Bjauck;828461]
    Quote Originally Posted by JBmurc View Post
    Increasing income tax rates for higher incomes will make investing in those assets that earn little income but potentially tax free capital gains even more tax efficient and appealing.

    Some people say that capital gains taxes are iniquitous if they do not allow for the inflationary aspect of maintaining the capital asset. So why shouldn’t an individual (income earning personal capital if you like) be allowed to earn a minimum tax-free income that is necessary for maintaining that individual. If for example $35000 is the current annual amount needed for an individual adult to subsist (food, shelter and nutrition) in NZ, then there should be a threshold of $35,000 before the tax rate is applied. That would help avoid the double taxation of income tax and GST on non-discretionary subsistence expenditure. Of course different areas if NZ have different costs of living, so maybe a regional subsistence threshold would be needed.
    If you look at places like Australia & Canada & the US, you'll find their tax system has address all these issues.

    Canada as a personal 'exemption' limit of around $10K a year before ANY income tax is paid (in NZ? nope). Canada also has a comprehensive tax credit scheme for the disadvantaged / those on disabilities / those that endured hardship (in NZ? this is done though WINZ with limited success).

    Australia's original method for determining CGT had an inflation factor table. As I mentioned before, it was grossly inaccurate as so many different asset classes have different inflation rates (ie. house price inflation is different than shares). At the end, Australia just copied the Canadian tax method of CGT which is 50% of the gain is in your pocket (you don't declare), and the other 50% is what you put down as taxable income. That 50% free bee gain pretty much accounts for inflation without the complex inflation tables that they had before.

    Despite NZ's existing no tax on share price gains, there still is the expectation by NZ investors to have 'dividends' paid for their investment. Basic accounting shows that once the profits of the company is paid out in dividends, the book value (equity) of the company remains the same and therefore.. the share price will remain the same, netting NO share price appreciation and thus no capital gain on sale of the shares. If you believe higher income tax brackets would change people's approach to investing into more assets with capital gains - i'm afraid there are not many in NZ (buy more residential properites?). What has to be done to bring a more fair tax system in NZ is BOTH CGT (specifically at multiple ownership of houses) and more income taxes on the higher end brackets. This is the way it's done in Canada.

  7. #37
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    [QUOTE=SBQ;824842]
    Quote Originally Posted by waikare View Post

    If Labour should be returned to office after this coming election, more than likely there will be an increase and additional taxes applied. Call what ever you wish, but in the end it's just another tax.

    Yep and in the grand of schemes... how much taxes is enough we should be paying? That's why when I look at an investment, I need to understand how much tax the corporation pays, how much tax the managed fund pays, how much tax the client pays and their income tax they pay. Then you go on to the consumption side like GST, rates, wow too many to list.... Is there a point where taxes are too high already? As I told my wife this morning, there needs to be another level of tax on the ultra high income earners - those around $70K / year income pay the same level of tax on an extra $1 earned than those CEOs earning $500K to $5M a year !!
    Certainly there should be another level for those on 500k to 5M per annum. These individuals have certainly made their contribution and should pay a reduced rate of tax after, say, 200k. What a boost to the economy if high earners were encouraged to earn more - rather than wasting time and energy on 'tax planning'. And what an insult to tell a man who has paid $1 million in tax that he now must pay a higher rate because 'he can afford it!' I'm glad you can see the folly of the present system, and good on you for pointing it out to your wife. My wife is far too busy stuffing the mattresses with banknotes to listen to me.
    Last edited by fungus pudding; 11-07-2020 at 07:19 AM.

  8. #38
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    [QUOTE=Bjauck;828461]
    Quote Originally Posted by JBmurc View Post
    .... So why shouldn’t an individual (income earning personal capital if you like) be allowed to earn a minimum tax-free income that is necessary for maintaining that individual. If for example $35000 is the current annual amount needed for an individual adult to subsist (food, shelter and nutrition) in NZ, then there should be a threshold of $35,000 before the tax rate is applied. That would help avoid the double taxation of income tax and GST on non-discretionary subsistence expenditure. Of course different areas if NZ have different costs of living, so maybe a regional subsistence threshold would be needed.
    What you suggest is pretty much done already (and more) but in a much less efficient way through government transfers. Those transfers have a massive bureaucracy behind them. Your suggestion is a much simpler alternative, but in practice how long would it be before those transfers crept back in. And up. Especially where families with children are concerned - they make great front page copy.

    There have been attempts here to reduce welfare benefits or increase work responsibilities when households have additional children while on benefit. Failed.

    A UK scheme though was implemented in which certain child tax credits were restricted to 2 children. Uproar, then settled down and funnily enough an increase in working parents.

  9. #39
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    Will there be a Wealth Tax? Almost certainly.

    Will it be called a Wealth Tax? Almost certainly not.

    Will it cover non-financial and non-property assets? Initially not.

    Will there be scope creep? Oh Yes!

  10. #40
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    Quote Originally Posted by GTM 3442 View Post
    Will there be a Wealth Tax? Almost certainly.

    Will it be called a Wealth Tax? Almost certainly not.

    Will it cover non-financial and non-property assets? Initially not.

    Will there be scope creep? Oh Yes!
    Probably correct on all points. On past form rental properties will be first cabs off the rank. I wonder if they will first check out the costs and benefits. Housing in general is a complex beast with many levers including rather importantly individuals with assets acting in their own interests.

    Wonder if anyone has ever developed a NZ econometric model. Like assessing impacts if any of the levers change.

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